Question

The State of Indiana agrees with the Ace Construction Company that Ace will do some repair work on a bridge. The agreement, however, does not specify the exact work to be done, the quality standards Ace must meet, and the time the job must be completed. Also, the agreement states an ambiguous formula for determining Ace's compensation. Later, before either it or the state has done anything, Ace backs out of the job. Then it is sued by the state. Ace defends by arguing that the contract fails because it (or the offer) is indefinite. Which of the following is true?

a. Ace is correct; the contract is indefinite and unenforceable.
b. Ace is incorrect; the contract is enforceable because it lacks material terms.
c. Ace is correct; the contract lacks consideration.
d. Ace is incorrect; the contract is enforceable even though it is indefinite.

Answer 1

d.)Ace is incorrect; the contract is enforceable even though it is indefinite.

Step-by-step explanation:

The general rule is that for a contract to be valid and enforceable, it must have certain material terms, such as the parties involved, the subject matter, price, and performance terms. However, there are exceptions to this rule. In this case, the fact that the agreement between the State of Indiana and Ace Construction Company lacks specific details such as the exact work to be done, quality standards, and the time for completion does not necessarily make the contract indefinite and unenforceable.

Under the doctrine of promissory estoppel, a party can be held legally responsible for its promise even if the promise lacks material terms. This doctrine is based on the principle that if one party reasonably relies on another party's promise to its detriment, enforcing the promise is necessary to prevent injustice. In this case, the State of Indiana can argue that it relied on Ace's promise to perform the repair work and incurred expenses or suffered damages as a result. Therefore, the contract may still be enforceable despite its indefinite nature.